New York could recoup hundreds of millions in property tax exemptions from Columbia University and New York University under new state bills — and funnel those dollars into the city’s public university system.
The two universities are currently spared from paying taxes totaling more than $320 million on their hundreds of private properties each year, state officials said. The proposal to end the tax break is expected to be announced Tuesday outside Columbia.
“These tax breaks were put in place hundreds of years ago to support nonprofit causes, and to do so without imposing a huge burden on taxpayers,” said State Sen. John Liu (D-Queens), chair of the NYC education committee and the bill’s co-sponsor. “Today that burden is far, far greater — perhaps unimaginable back in the times this first started.”
The exemptions are aimed at boosting the economic and cultural value of having major institutions in New York. But as both universities buy up more property, the state has forgone a major revenue stream making the setup increasingly untenable.
Columbia is now the city’s largest private landlord with a roughly 320-property portfolio valued at close to $4 billion, according to a joint investigation this fall by The New York Times and The Hechinger Report.
Private universities would only be subject to the law if their property taxes exceed $100 million annually, which NYU qualifies for too. The bill is co-sponsored in the State Assembly by Zohran Mamdani (D-Queens).
“The issue is that we are faced with severe fiscal constraints in the city and even at the state,” said Liu. “Everything has to be on the table — looking at not only cost reductions, but revenue raisers. And this is a significant item.”
The City University of New York is facing a 5% cut under a recent savings plan ordered by Mayor Adams. The administration has already directed another slash of the same size and threatened further cuts if the federal government does not step in to help with the costs of shelter and services for migrants.
The faculty and staff union explained the vast majority of students at CUNY are graduates of the city’s public schools, compared with Columbia and NYU that are enrolling fewer students from New York.
“It’s the working people of New York City who wind up subsidizing the exemption that these two large mega universities enjoy,” said James Davis, president of PSC-CUNY. “It’s those same working families that wind up sending their families to the City University of New York.”
Davis said CUNY campuses are being “battered and bruised” by the city’s cuts and loss of pandemic-era federal aid. The proposed revenue could help recoup the more than 350 faculty and staff positions lost over the last couple of years, boost student services from academic advising to mental health counseling, and address decades of deferred maintenance, he said. Just 8% of CUNY’s buildings are categorized as in a state of “good repair.”
A representative for Columbia said they are reviewing the legislation — but that the university has long served as one of the major economic drivers of the city.
“Beyond the financial resources we provide to our local community,” said university spokeswoman Samantha Slater, “from Morningside Heights to Harlem, Washington Heights and the city at large — we also have substantial economic impact through research, staff and faculty time investment, space to the community and other support.”
“To name some real-life examples, Columbia research averted the L train closure, our athletic complex became a field hospital during the pandemic, and we opened our residence halls to doctors and health care workers,” she said.
NYU did not immediately return a request for comment. A spokesman for the university told the Times that the change would be “extraordinarily disruptive” and force them to “rethink much of the way we operate.”
The tax breaks are embedded in the state constitution and would take at least two consecutive legislative sessions to revise. Voters would then have the opportunity to weigh in on the provision, meaning the funding would not be available to CUNY until the 2027-28 school year.
If passed, New York would become one of the first cities to redirect property tax revenue straight into its public university system, while other localities including Providence and Philadelphia have reached deals with Brown University and the University of Pennsylvania, respectively for payments in lieu of taxes.
“There are many other cities which have come to agreements with some of their elite universities,” said Liu, “and it’s time that New York do the same.”
